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  • How would you rather be charged for investment advice?

    Utkarsh Choudhary
    14 replies

    Replies

    Chirag Dodiya
    Fixed fee always works better because of cost overtime if you go with percentage.
    Utkarsh Choudhary
    @chirag_dodiya Absolutely. The compounding effect is real with commissions or trailer fees.
    Donald Allen
    Optimal alignment of interests: Focus on investment performance, not transaction volume. Generous fee for positive outcomes, no profit sharing.
    Utkarsh Choudhary
    @donaldal23 completely agree. A pre-defined amount on positive outcomes makes it much more attractive as compared to an uncapped number.
    Julien Fayad
    Sections serverless engine
    Sections serverless engine
    A generous fixed performance fee: This is the best way to have everyone's interests aligned. You are not incentivized to maximize transactions but instead to make sure the investment is performing BUT you are not sharing the profits and instead get a generous fee when it does perform (regardless of much money the client is investing). Another model could be capped commissions on performing investments
    Aneesh Gupta
    Is the 2 and 20 model still holding good for hedge funds?
    Utkarsh Choudhary
    @_aneeshgupta_ Yes very much so. If we get into modes of charging from HNI investments, its a deep rabbit hole. The focus of this discussion is on retail investors who still haven't had access to quality advisory.
    Aneesh Gupta
    @utkarsh_choudhary92 got it thanks Utkarsh! For retail I think a fixed fee works better if you think about products like Smallcase for example.
    Arpita Sinha
    Commissions eat up the returns exponentially. Fixed fee always works better. It also aligns the interest of the advisor and there's no chance of product pushing.
    Utkarsh Choudhary
    @arpita_sinha1 Agreed. Now that people have finally started realising the compounding effect of trailer fees, this will hopefully become the norm.
    Ibrahim Saidu
    Great insight on charging for investment advice! I totally get the point about a fixed fee, especially when considering retail and platforms like Smallcase. It does simplify things and gives a clear picture. On a slightly different note, have you ever explored opportunities in oil well investing https://www.oilandgasinvestmentf... ? Curious to know your take on that front! Let's keep the financial chats going!